Mexicohttp://www.newgeography.com/category/story-topics/mexico
The taxonomy view with a depth of 0.enAmerica's True Power In The NAFTA Centuryhttp://www.newgeography.com/content/003931-americas-true-power-in-the-nafta-century
<p>OK, I get it. Between George W. Bush and <a href="http://www.forbes.com/profile/barack-obama/">Barack Obama</a> we have made complete fools of ourselves on the international stage, outmaneuvered by petty lunatics and crafty kleptocrats like Russia&rsquo;s<a href="http://www.forbes.com/profile/vladimir-putin/">Vladimir Putin</a>. Some even claim we are witnessing &ldquo;<a href="http://www.nysun.com/foreign/collapse-of-american-power-recalls-dis/88400/">an erosion of world influence</a>&rdquo; equal to such failed states as the Soviet Union and the French Third Republic. &ldquo;Has anyone noticed how diminished, how very Lilliputian, America has become?&rdquo; my friend Tunku Varadajaran <a href="http://www.thedailybeast.com/articles/2013/09/05/who-shrunk-america.html">recently asked</a>.</p>
<p>In reality, it&rsquo;s our politicians who have gotten small, not America. In our embarrassment, we tend not to notice that our rivals are also shrinking. Take the Middle East — please. Increasingly, we don&rsquo;t need it because of North America&rsquo;s unparalleled resources and economic vitality.</p>
<p>Welcome then to the NAFTA century, in which our power is fundamentally based on developing a common economic region with our two large neighbors. Since its <a href="http://www.ustr.gov/trade-agreements/free-trade-agreements/north-american-free-trade-agreement-nafta">origins in 1994</a>, NAFTA has emerged as the world&rsquo;s largest trading bloc, linking 450 million people that produce $17 trillion in output. Foreign policy elites in both parties may focus on Europe, Asia and the Middle East, but our long-term fate lies more with Canada, Mexico and the rest of the Americas.</p>
<p>Nowhere is this shift in power more obvious than in the critical energy arena, the wellspring of our deep involvement in the lunatic Middle East. Massive finds have given us a new energy lifeline in places like the Gulf coast, the Alberta tar sands, the Great Plains, the Inland West, Ohio, Pennsylvania and potentially California.</p>
<p>And if Mexico successfully reforms its state-owned energy monopoly, PEMEX, the world energy — and economic — balance of power will likely shift more decisively to North America. <a href="http://www.cnbc.com/id/100965068">Mexican President Pena Nieto&rsquo;s plan</a>, which would allow increased foreign investment in the energy sector, is projected by at least one analyst to boost Mexico&rsquo;s oil output by 20% to 50% in the coming decades.</p>
<p>Taken together, the NAFTA countries <a href="http://www.energyforamerica.org/wp-content/uploads/2012/06/Energy-InventoryFINAL.pdf">now boast larger reserves</a> of oil, gas (and if we want it, coal) than any other part of the world. More important, given our concerns with greenhouse gases, NAFTA countries now possess, by some estimates, more clean-burning natural gas than Russia, Iran and Qatar put together. All this at a time when U.S. energy use <a href="http://www.eia.gov/todayinenergy/detail.cfm?id=12691">is declining</a>, further eroding the leverage of these troublesome countries.</p>
<p>This particularly undermines the position of Putin, who has had his way with Obama but faces long-term political decline. Russia, which relies on hydrocarbons for two-thirds of its export revenues and half its budget, <a href="http://www.businessweek.com/articles/2013-08-29/can-vladimir-putin-survive-americas-energy-boom%20http://www.realclearpolitics.com/articles/2013/09/04/american_technologists_and_entrepreneurs_re-set_russian_relations_119797.html">is being forced to cut gas prices in Europe</a> due to a forthcoming gusher of LNG exports from the U.S. and other countries. In the end, Russia is an economic <a href="http://blogs.the-american-interest.com/wrm/2012/12/23/putin-whistles-in-the-dark-over-mother-russias-demography/">one-horse show</a> with declining demography and a discredited political system.</p>
<p>In terms of the Middle East, the NAFTA century means we can disengage, when it threatens our actual strategic interests. Afraid of a shut off of oil from the Persian Gulf? Our response should be: Make my day. <a href="http://www.forbes.com/energy/">Energy</a> prices will rise, but this will hurt Europe and China more than us, and also will stimulate more jobs and economic growth in much of the country, particularly the energy belts of the Gulf Coast and the Great Plains.</p>
<p>China and India have boosted energy imports as we decrease ours; China is expected to surpass the United States as the world&rsquo;s largest oil importer this year. At the same time, in the EU, <a href="http://blogs.the-american-interest.com/wrm/2013/08/23/another-reason-for-britain-to-frack/">bans on fracking</a> and over-reliance on unreliable, <a href="http://www.economist.com/news/europe/21585029-hopes-fears-and-worries-europes-quest-renewable-energy-when-wind-blows/print">expensive &ldquo;green&rdquo; energy</a> has <a href="http://www.independent.co.uk/news/uk/home-news/gas-crisis-consumers-face-shock-200-rise-in-bills-as-cold-weather-and-snow-lead-to-low-fuel-reserves-8549048.html">driven up prices</a> for both gas and electricity.</p>
<p>These high prices have not only eroded depleted consumer spending but is leading some manufacturers, including in Germany, to look at relocating production , notably to energy-rich regions of the United States. This shift in industrial production is still nascent, but is evidenced by growing U.S. manufacturing at a time when <a href="http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10287488/Triple-shocks-threaten-Europes-sickly-and-deformed-recovery.html">Europe</a> and Asia, particularly <a href="http://www.stratfor.com/weekly/recognizing-end-chinese-economic-miracle">China</a>, are facing stagnation or even declines. Europe&rsquo;s industry minister recently warned of &ldquo;an<a href="http://www.telegraph.co.uk/finance/financialcrisis/10295045/Brussels-fears-European-industrial-massacre-sparked-by-energy-costs.html">industrial massacre</a>&rdquo; brought on in large part by unsustainably high energy prices.</p>
<p>The key beneficiaries of NAFTA&rsquo;s energy surge will be energy-intensive industries such as petrochemicals — major new investments are being made in this sector along the Gulf Coast by both foreign and domestic companies. But it also can be seen in the resurgence in North American manufacturing in automobiles, steel and other key sectors. Particularly critical is Mexico&rsquo;s recharged <a href="http://www.cnbc.com/id/49007307">industrial boom</a>. In 2011 roughly half of the nearly $20 billion invested in the country was for manufacturing. Increasingly companies from around the world see our southern neighbor as an ideal locale for new manufacturing plants; <a href="http://www.forbes.com/companies/general-motors/">General Motors</a> <span data-ticker="GM" data-exchange="NYSE" data-type="organization" data-naturalid="fred/company/80224" data-quotes-closing="36.37" data-quotes-now="36.02"><a href="http://www.forbes.com/companies/general-motors/">GM -0.96%</a></span>, <a href="http://www.forbes.com/companies/audi/">Audi</a> , Honda, Perelli, Alcoa and the Swedish appliance giant Electrolux have all announced major investments.</p>
<p>Critically this is not so much Ross Perot&rsquo;s old &ldquo;sucking sound&rdquo; of American jobs draining away, but about the shift in the economic balance of power away from China and East Asia. Rather than rivals, the U.S., Mexican and Canadian economies are becoming increasingly integrated, with raw materials, manufacturing goods and services traded across the borders. This integration has <a href="http://www.fas.org/sgp/crs/row/R42965.pdf">proceeded rapidly since NAFTA</a>, with U.S. merchandise exports to Mexico growing from $41.6 billion in 1993 to $216.3 billion in 2012, an increase of 420%,while service exports doubled. MeanwhileU.S. imports from Mexico increased from $39.9 billion in 1993 to $277.7 billion in 2012, an increase of 596%.</p>
<p>At the same time, U.S. exports to Canada increased from $100.2 billion in 1993 to $291.8 billion in 2012.</p>
<p>Investment flows mirror this integration. As of 2011, the United States accounted for 44% of all foreign investment in Mexico, more than twice that of second-place Spain; Canada, ranking fourth, accounts for another 10%. Canada, which, according to a recent <a href="https://www.atkearney.com/documents/10192/1464437/Back+to+Business+-+Optimism+Amid+Uncertainty+-+FDICI+2013.pdf/96039e18-5d34-49ca-9cec-5c1f27dc099d">AT Kearney report</a>, now ranks as the No. 4 destination for foreign direct investment, with the U.S. accounting for more than half the total in the country. Over 70% of Canada&rsquo;s outbound investment goes to the U.S.</p>
<p>Our human ties to these neighbors may be even more important. (Disclaimer: my wife is a native of Quebec). Mexico, for example, accounts for nearly <a href="http://www.pewhispanic.org/2013/01/29/statistical-portrait-of-the-foreign-born-population-in-the-united-states-2011/#1">30% of our foreign-born population</a>, by far the largest group. Canada, surprisingly, is the largest source of foreign-born Americans of any country outside Asia or Latin America.</p>
<p>We also visit each other on a regular basis, with Canada by far the biggest sender of tourists to the U.S., more than the next nine countries combined; Mexico ranks second. The U.S., for its part, accounts for two-thirds of all visitors to Canada and the U.S. remains by far largest source of travelers to Mexico.</p>
<p>These interactions reflect an intimacy Americans simply do not share with such places as the Middle East (outside Israel), Russia, and China. There&rsquo;s the little matter of democracy, as well as a common sharing of a continent, with rivers, lakes and mountain ranges that often don&rsquo;t respect national borders. Policy-maker may prefer to look further afield but North America is our home, Mexico and Canada our natural allies for the future. Adios, Middle East and Europe; bonjour, North America.</p>
<p><em>This story originally appeared at Forbes.</em></p>
<p><em>Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of <a href="http://www.amazon.com/gp/product/0375756515/ref=as_li_ss_tl?ie=UTF8&amp;tag=newgeogrcom-20&amp;linkCode=as2&amp;camp=1789&amp;creative=390957&amp;creativeASIN=0375756515" rel="nofollow">The City: A Global History</a> and </em><em><a href="http://www.amazon.com/gp/product/B005B1BN90/ref=as_li_ss_tl?ie=UTF8&amp;tag=newgeogrcom-20&amp;linkCode=as2&amp;camp=1789&amp;creative=390957&amp;creativeASIN=B005B1BN90" rel="nofollow">The Next Hundred Million: America in 2050</a></em><em>. His most recent study, <a href="http://www.newgeography.com/content/003133-the-rise-post-familialism-humanitys-future" rel="nofollow">The Rise of Postfamilialism</a>, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.</em></p>
<p><em><a href="http://commons.wikimedia.org/wiki/File:NAFTA_logo.png">NAFTA logo</a> by <a href="http://en.wikipedia.org/wiki/User:AlexCovarrubias" title="en:User:AlexCovarrubias">AlexCovarrubias</a>.</em></p>
http://www.newgeography.com/content/003931-americas-true-power-in-the-nafta-century#commentsCanadaChinaDemographicsEconomicsEuropePoliticsEnergyMexicoFri, 13 Sep 2013 11:01:39 -0400Joel Kotkin3931 at http://www.newgeography.comRethinking Risk During a Financial Crisis: Learning from Mexico http://www.newgeography.com/content/00464-rethinking-risk-during-a-financial-crisis-learning-mexico
<p>Last month I visited a small town in southern Mexico. It is a quiet and modestly prosperous place. Outside some of the homes are older Suburbans, Jeeps and Explorers; the license plates show that their owners have recently returned from the US, driven out by the collapsing economy and heightened nativist anxieties. Almost every family, it seems, has some member who has spent time up north; only a very few of them are still hanging on through the recession.</p>
<p>For the most part, Mexicans are innocent by-standers in the current financial debacle. They didn’t allow themselves to be talked into strange mortgages or multiple credit cards; whether north or south of the border, this is for them <a href="/content/00428-in-ethnic-enclaves-the-us-economy-thrives">still predominantly a cash economy</a>. Even for those who went to the US, their key goal was to accumulate dollars and send them south, where, as pesos, they provide the basics and even a few luxuries for many families. Until recently, these remittances have been second only to oil income in importance for Mexico; now both are shrinking fast. </p>
<p>There is something more than a little unfair in the manner in which the recession is hurting our southern neighbor. Mexicans, for the most part, have a personal risk calculus that is the complete reverse of ours. Like most people who have experienced hard times, they are not obsessed with the little things that might go awry; they don’t place little flags around puddles in the grocery store, and most dogs have never received a rabies shot. The sidewalks often look as though a tree is trying to push its way through the ground and electrical cables are frequently visible. It’s not unusual to see a local butcher frying up vast cauldrons of meats in front of his carnecineria, something that would drive American health inspectors to apoplexy. </p>
<p>In contrast to their wealthier Northern neighbors, Mexicans seem quite happy to take responsibility for themselves and don’t expect to sue someone every time they stub their toe. But their collective view of risk is also the reverse of ours. Property is, for most people, something to live in and not something for speculation. Building one’s own home is common but it’s usually done in stages, whenever there is cash to spare. The results may be untidy, with streets perpetually possessing the appearance of construction zones, but there is no evidence of any foreclosure crisis—forests of ‘for sale’ signs are absent, in Veracruz, at least. </p>
<p>Nor is that the only visual difference between nondescript Mexican and American cities. Antiseptic zoning is much less common in Mexico, with the result that families live above the store, or behind the workshop, or even on the roof of some buildings. Affluent homes may stand next to literal ruins. In most American cities, this would be evidence of a neighborhood slipping into decay, causing realtors to flee to more ordered areas. But for Mexicans, this juxtaposition simply adds to the sense of being in an organic place rather than on a Disney set. What it means for neighborliness is hard to judge, but it would certainly make an interesting comparative research project.</p>
<p>Of course, there are some equivalents to the homogenous subdivisions that dominate the American housing market. I saw several large up-scale gated communities that were standing idle, waiting for better times. I was also shown several housing developments, where government agencies were building terraced homes for state workers. What is striking to the visitor is that these would never be offered in the US housing market, as they would be judged to be unacceptably small. At approximately one thousand square feet, they are half the size of the average American home, (approximately 2200 square feet) and significantly smaller than most new houses. </p>
<p>Even though Mexican families are, on average, larger (with more children and more generations living together), the expectation is not that every member of the family gets a bathroom or even a bedroom. It is also common to buy small and build out, or up, as needs dictate and finances permit. Anyone who has traveled in Asia will also be familiar with this phenomenon, which manifests itself in ground floor apartments that encroach upon the street, balconies that become bedrooms and so forth. High density and modest means lead to invention, if not the kinds of appearance mandated by Home Owner Associations or preferred by the fusspot New Urbanist designers.</p>
<p>In the past, the Mexican financial system has been criticized for maintaining a tight hold on credit. Even before the current crisis, high interest rates were unfriendly to the consumer, slowing the pace of both urban development and speculation. Given our current crisis, perhaps it’s worth asking whether this points to how the American market may develop in the future. Certainly, we can expect that credit will remain tight for a significant while. The rules for obtaining a mortgage will become more onerous; interest rates will be fixed, appraisals will be exact. McMansions will be of little interest except to large families of means; smaller and older homes will be at a premium. Definitions of overcrowding may change; design expectations will be downsized, and home maintenance will become more usual. As opportunities in the formal labor marketplace shrink, perhaps for an extended period, more Americans will work from their homes and garages, much as occurs in many developing countries.</p>
<p>There may also be significantly less mobility, with little or no speculative purchasing. This is likely to have the greatest impact on the condominium market. Even affluent parents will be obligated to keep their college-age kids on campus rather than in condos that they hope to flip after graduation. And even when they have a degree, these young adults – with large student loans, minimal credit and no cash for a down payment – will become used to staying with their parents for longer periods, as is frequently the case in Mexico and other developing markets. This could extend into marriage and even family formation. The condos themselves will, for the foreseeable future, revert to rental properties, catering to those who can no longer maintain a foothold in the owner market. </p>
<p>This does not imply that American cities are going to turn into Mexican ones any time soon. But there is much to be learned by studying the ways that Mexicans calculate risk. We might have fewer families borrowing beyond their means, and continually trying to beat the market. And with less aggregate risk in one part of our lives, we might then view other parts of our daily world with a little less obsession with control. We might be a little more relaxed about who lives next door; we might also be a little more tolerant about the age of their truck or the color of the drapes. After all, they might be Mexican, in which case we know that, if they are there, they can probably actually afford it.</p>
<p><i>Andrew Kirby is the editor of the interdisciplinary <a href= "http://www.ees.elsevier.com/jcit">Elsevier journal “Cities.”</a>This is his 20th year as a resident of Arizona. </i></p>
http://www.newgeography.com/content/00464-rethinking-risk-during-a-financial-crisis-learning-mexico#commentsUrban IssuesFinancial CrisisEconomicsSuburbsMexicoTue, 09 Dec 2008 01:39:56 -0500Andrew Kirby464 at http://www.newgeography.com